The administration aims to reach an agreement with the Liberal Democratic Party by the end of the week on how corporate income tax cuts will be presented in the policy blueprint for fiscal 2015, economic and fiscal policy minister Akira Amari said Tuesday.
Amari said the government and the LDP have already agreed to cut the relatively heavy corporate tax rate in stages starting next April. The blueprint is due later this month.
The government and the LDP’s tax panel have to decide on “how fast and by what percent” to slash the tax, Amari told a news conference.
Amari has proposed reducing the current 35 percent corporate tax rate to below 30 percent within about five years from fiscal 2015, but some LDP lawmakers are wary of drastic cuts given the nation’s precarious fiscal health.
Last week, Prime Minister Shinzo Abe — who is eager to cut the corporate tax rate to boost foreign investment in Japan — urged Amari and Takeshi Noda, chairman of the LDP’s Research Commission on the Tax System, to discuss the matter.
Japan’s effective corporate income tax rate — consisting of national and local taxes — is much higher than China’s 25 percent, South Korea’s roughly 24 percent and Singapore’s 17 percent, Finance Ministry data show.